Identity thieves: let's catch them if we can: nearly 10 million Americans had their identity stolen in the last year, making it the fastest growing white-collar crime.

• Author: Morton, Heather

Sheila's nightmare began 11 years ago when she was only 19. A co-worker stole her Social Security number from her personnel file and used it to get a Mexican relative into this country. Using Sheila's name and Social Security number, the Mexican woman applied for welfare, opened credit card accounts, filed tax returns and got traffic tickets.

Sheila didn't know about the theft until she was 23 and tried to buy a car. Warrants were issued for her arrest because her identity clone had committed welfare fraud and child abuse.

If Sheila had been pulled over for a traffic ticket, she would have been hauled off to jail. So she lived in fear, essentially as a fugitive, because at that time, it was extremely difficult to get the warrants quashed. Through a lot of effort, Sheila cleaned up her credit as best she could.

But the nightmare didn't end. A 1999 credit report showed that new credit cards had been issued again to the other woman. Many of them were re-issued despite earlier defaults on the accounts.

Today, the woman continues to use Sheila's name and identity. But Sheila has a new Social Security number. It was granted because her identity theft case involved too many state, federal and local jurisdictions to investigate. Now, Sheila is working to get her records--high school and college degrees, driver's license, work history--transferred to her new SS number.

State legislators have heard Sheila's story and many more like it. To combat the growing crime, legislatures have enacted specific identity theft laws or expanded existing statutes. Penalties vary from misdemeanor to felony depending on the economic damage, the age of the identity theft victim and the number of times the perpetrator has committed the crime.

Congress in late November passed new legislation that protects consumers from identity theft, but which also pre-empts state laws in certain areas. Despite state and federal laws, ID theft continues to grow.

WHAT CAN STATES DO?

Prosecute more cases: "Banks and corporations have found it is easier to write off a loss than to prosecute it," says Frank Abagnale, a reformed identity thief who wrote Catch Me if You Can, which was made into a Leonardo DiCaprio movie. "Most district attorneys don't prosecute forged checks under $5,000. Most white collar crimes aren't prosecuted unless they top $250,000. The FBI doesn't investigate crimes under $100,000."

New Jersey, however, now prosecutes cases involving people who assume five or more...